Yesterday Senate Republicans blocked a White House proposal to extend Bush-era income-tax cuts for families earning less than $250,000 annually. Those cuts, phased in starting in 2001, have been scheduled to expire on Jan. 1, 2011, as per prior agreement. The sunset provision had been included as a measure of fiscal discipline. Good thing, too, since the federal deficit has sky-rocketed ever since.
But a lot has happened since 2001. Back then you could find middle-class Americans at the mall. Now, thanks to the recent (ongoing?) recession, you can't find them anywhere. Millions have lost their jobs, their homes, their credit cards. They rent, and they collect food stamps. They have moved out of the Middle-Class Neighborhood, which is shrinking all the time. President Barack Obama feels that these folks are entitled to some relief, at least until the economy recovers.
Republicans agree, but feel that taxpayers in the upper-income brackets need relief as well. The GOP calls them "job creators," who theoretically stimulate the economy either through their own consumption of good and services or through direct investment in businesses that hire employees. Just ask the man who was named after those cuts, George W. Bush himself. "Lower taxes," advised the former President during his recent book tour, "enable the job creators, i.e. small businesses, to have more money with which to expand their work force." So extending the tax cuts across the board should allow these people to do what they do best. Create Jobs.
But wait. Along comes one Sherrod Brown, Democratic senator from Ohio, who says, "
Wait, I'm thinking to myself, these two gentlemen cannot both be right. What are we gonna do? That's it, go to the data, silly. So I did. I went to the U.S. Bureau of Labor Statistics website and looked at employment data generated by the Household Survey since World War II. What I found (illustrated in the chart above) was that the Bush decade, with all those job-creator tax cuts, was the weakest in six decades for job growth, with only 2.3 million jobs added. Each of the other decades added at least three times as many, the 1970s nine times as many. And the Bush decade even had an extra ten months of 2010 thrown in, just to be generous.
Sherrod Brown? OMG HE'S ROTM! I guess those rich folks were too busy downsizing, offshoring, and just plain speculating to, um, create jobs.
Here's another graph, which shows no discernible correlation between the top income-tax rate and nonfarm employment:
[click to enlarge]